Personal Property Taxes, Those Lexus Christmas Ads, and Free Tax Advice
It is that time of year again when Lexus starts trumpeting its Christmas sales event. To those of you out there who are actually considering buying a car for Christmas, I must tell you that if you live in Missouri, DON’T. In fact, from a tax perspective, buying a car for Christmas is about the dumbest thing you can do.
The reason is simple if you wait just one week to make the purchase in January, you can save a lot of money in personal property taxes. Now, Lexus knows this, which is why the sale is extended to January 2. Not all states have personal property taxes, so you Illinois readers can car shop on Christmas Eve all you want. But in Missouri, the law states that you pay personal property taxes on vehicles you own as of January 1.
So if you buy a car for Christmas in December of this year, the personal property taxes on the new purchase will be due December 31, 2008. If you merely wait until January 2, 2008, just one day after Mizzou beats Arkansas in the Cotton Bowl, to buy the new car, you will not have to pay personal property taxes on the new car until December 31, 2009. The personal property taxes you pay at the end of 2008 will be for the car you are presumably trading in for the new Lexus. And that car being traded in will almost always have substantially less in taxes due on it, as personal property taxes are set by Blue Book value.
Here is some additional good advice if you are considering making some sort of purchase with an enormous red bow around it. And also, in assumed compliance with some regulatory law somewhere, I should probably tell you I am not a CPA.